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Interplay rips apart Bethesda's legal argument...again
Interplay rips apart Bethesda's legal argument...again [ Company -> Update ]
Posted by King of Creation Wed 23 Nov 2011, 6:31 AM
More info on Game: Fallout: Online | More info on Company: Bethesda v. Interplay

The main court battle between Interplay and Bethesda is fast approaching, and Interplay has now submitted a new document in opposition to Bethesda. This one is titled "Opposition of Defendant/Counter-Claimant Interplay Entertainment Corp. To Bethesda Softworks LLC's Motion in Limine." We reported before about Bethesda's Motion in Limine (and Interplay's), and now Interplay's lawyer is focused on ripping apart Bethesda's before the trial. As with all court documents, it is full of legal jargon, case history and precedence, and general lawyering. I'll try and save you from most of that. Interplay's attorney nicely summarizes, however, in his introduction:

BSW's Motion in Limine, and each request therein, should be denied in its entirety. BSW's Motion is not a proper motion in limine directed at threshold issues of admissibility of evidence. Instead, BSW's Motion seeks an order shifting Plaintiffs burden of proof as to certain essential elements of BSW' s claims to Interplay. BSW's Motion focuses on the sufficiency of evidence to support Interplay's arguments -- even though no evidence has been introduced and Interplay has not had an opportunity to present its case at trial. This is not a proper subject for an in limine motion.

BSW simply reasserts the exact same points that it has raised at least twice before with respect to the meaning and scope of the Trademark License Agreement ("TLA") -the very issues the trial is set to determine. The TLA demonstrates on its face that the parties intended for Interplay to create a "Fallout-branded MMOG" that would include copyrighted or copyrightable elements of Fallout intellectual property. To the extent the Court determines that the TLA is susceptible to different interpretations, the Court may look to parol evidence for indications of the parties' intent, or if it is determined that the agreement is susceptible to multiple differing interpretations, the Court will have to address whether there was a failure of the parties to have a meeting of the minds at the time they signed the TLA and the impact such a failure has on all of the transactions, including the Asset Purchase Agreement ("APA"), for which the TLA was consideration, or whether the conditions in Section 2.3 of the TLA are enforceable contract terms.

So here, we see Interplay's attorney essentially arguing what the Fallout community has been saying - Bethesda's Motion in Limine was idiotic and contradictory. Interplay's attorney goes on to cite numerous legal sources and generally destroys Bethesda's Motion. In addition to the main issue of the Motion in Limine being something else entirely, Interplay's attorney takes up the issue of Bethesda trying to shift the burden of proof:

BSW's argument is legally incorrect. It is BSW's obligation to prove the existence of a valid and enforceable agreement, where all the elements of a contract exist, and Interplay's burden to prove its affirmative defense of license to the extent that the underlying agreements are not declared null and void for a lack of the meeting of the minds of the parties.
Because BSW seeks to escape its obligations under the TLA, BSW bears the burden to prove the occurrence of the condition subsequent (Section 2.3) necessary to terminate Interplay's rights.ld. This burden should include both proof of the meaning and interpretation of the agreement and particularly Section 2.3 among others, that the parties had the same understanding of the meaning thereof, as well as persuading the Court that Interplay's development and financing efforts were not sufficient to comply with the language of the agreement.
BSW's argument that it cannot "prove a negative" also is inapplicable. (See, Memorandum in Support of BSW's Motion at 7-8.) BSW again provides only a string cite without any analysis of the cases cited. Refusing to shift BSW's burden of proof to Interplay will not require BSW to prove the negative of a fact, as it contends. BSW's burden is no different than that faced by any breach of contract plaintiff, who must prove up the validity of the contract and then prove breach by showing a defendant's failure to perform. See VLIW Technology, LLC v. Hewlett-Packard Co. 840 A.2d 606, 612 (Del.Supr. 2003); see also, Gregory v. Frazer, 2010 WL 4262030 (Del.Com.Pl. Oct. 8, 2010) at *1 (plaintiff proved defendant's failure to pay per contract terms). To find otherwise would mean that in every contract case plaintiff would be able to shift the burden to the defendant to show that it performed rather than plaintiff having to prove that defendant breached.

And for the part that got the internet really riled up, Bethesda tried arguing that Interplay should be barred from arguing that it started full-scale development of Fallout: Online, even though that's what Bethesda compelled Interplay to do:

BSW seeks an order precluding Interplay from arguing as part of its defense that it was in "full-scale development of the Fallout MMOG and had satisfied the requirements for "Minimum Financing" as of April4, 2009.
This is another attempt by BSW to sidestep the procedural requirements of a summary judgment motion.

Bethesda argues that the game is not in development, and that Interplay has no idea what is going on in Bulgaria at Masthead:

BSW's logic in regard to the identities of Masthead employees being unknown makes no sense. By analogy, even though the foundation is laid, the walls are framed, the roof is installed and a construction crew can be observed working on the site, there is no evidence that a house is being built unless the particular carpenter who pounded a particular nail can be specifically identified. But the TLA does not contain any requirement that would have caused Interplay to scrutinize Masthead's pre-April 2009 work to that detail.

Interplay's attorney also takes issue with Bethesda's "ambiguous" interpretation of the contracts and their attempt to preclude Interplay from offering evidence and testimony to support their own more logical interpretation:

For example, Section 3.4 of the TLA itself creates ambiguity because, it works to terminate Interplay's right to use copyrighted material, which by its very nature must mean that Interplay had the right to use the copyrighted material in the first instance, or at the very least the parties understood this to be included as part of the agreement or why else would this language be necessary to take back something that was not understood to have been granted? It would by its very nature be superfluous.

Further, Interplay argues against the blatant bad-faith of Bethesda - as the contract plainly allows Interplay to create a Fallout-branded MMOG, but Bethesda is now trying to say that Interplay was only ever allowed to use the name Fallout and not any of the setting, characters, etc.

Section 2.1 of the TLA authorizes Interplay to use the Fallout Trademark, not with just any video game, but: "on and in connection with its FALLOUT-branded MMOG" and not for any other purpose. (Emphasis added.) BSW focuses on the individual word "brand," divorcing itself from the context of the remainder of the TLA and the related transactions, and contends this means "Interplay may only use the name Fallout in connection with a game named Fallout." (See Memorandum in Support of BSW's Motion at p. 19-21.) Not only is this circular and awkward syntax, but to read the TLA as narrowly as BSW suggests defeats the purpose and intent of the agreement and renders the TLA meaningless.
This begs the question: What is the "Fallout-branded MMOG" to which Interplay is supposed to attach the Fallout trademark if it can't use the Fallout characters, creatures, locations, backstory, on something that has absolutely nothing to do with the Fall out world? That is absurd. One can just imagine if Interplay tried to get approval to put the name "Fallout" on a game that had people falling out of windows, what BSW would say. Most likely BSW would scream that this type of game does not comport with the look and feel of the Fallout brand and image and thus not approve the game. What constitutes the "Fallout-branded MMOG," is not specifically defined in the APA or TLA. This is because the parties already had an understanding as to what a "Fallout-branded MMOG" meant based on their three year relationship and course of dealing under the ELA. The ELA should not be considered parol evidence because Section 2.8 incorporates it into the later transactions and specifically permits the parties to rely on it as an aid to interpret the subsequent agreements.

Even though Bethesda argues that Interplay never had the right to use any of the copyrighted Fallout elements (characters, setting, etc.), the TLA specifically stated which elements Interplay had to remove from their game in the event they did not meet the requirements in the contract and were forced to abandon the use of the Fallout trademark:

In the event the TLA terminates, Section 3.4 of the TLA provides a detailed accounting of the Fallout-branded MMOG elements that Interplay may continue to use in a "non-Fallout MMOG." (Emphasis added.) Such materials deemed "Interplay-Derived MMOG Elements" include:

inter alia, any or all locations, graphic representations, creatures, monsters, names, likenesses, behaviors, religions, deities, environments, legends, fairy tales, stories, universes, character classes or character professions that are in the public domain, are owned by any entity other than Bethesda and/or its affiliates and/or licensors or otherwise are not subject to [Bethesda's] copyright or trademark protection.

Section 3.4 of the TLA further explains that the Interplay-Derived MMOG Elements are those which:

do not use, incorporate, trade on or otherwise exploit any Fallout-related intellectual property created by Interplay or by Bethesda or by their respective parents, subsidiaries, affiliates, successors or assigns, including without limitation any Fallout artwork, locations, graphic representations, story lines, creatures, monsters, names, likenesses, behaviors, environments (e.g., vaults), universes, settings, legends, characters, character classes, character professions, packaging, advertisements, text and translations, and any and all Fallout proprietary characters, trademarks, copyrights and artwork ... (Emphasis added.)

So which is it, Bethesda? Did Interplay have the right to use these things as spelled out in the TLA, or did they not have the right to use anything as you argue now? Sounds more and more like a bad-faith contract that could be voided. Maybe this guy needs to sort it out:

Thanks to the Mysterious Stranger.

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